Investors have plowed into Europe, making it the consensus positive call, but some analysts are starting to think it's time to curb the enthusiasm.
Despite markets' volatile start to the year, investors have plowed $15.5 billion into developed Europe equity funds so far this year, according to data from Jefferies. The funds have seen 32 straight weeks of inflows, as investors bought around $81.8 billion worth of shares, the data show.
(Read more: What the EM sell-off means for European stocks)
The enthusiasm has left equity valuations "too stiff," said Willem Nabarro, head of European equities for Asia at Exane-BNP Paribas. Europe's shares aren't offering enough compensation for the macro risks, he told CNBC.
"Just look at the valuation of the Spanish banks," he said. "They're trading at the same levels as, for example, the Swiss banks and more expensive than the French banks or some of the Nordic banks, where the risks are much lower," he noted.
"It's a good time if you have had this run, take profit and run," he added.
(Read more: Goldman warns of risks in European stock markets)
Nabarro is also concerned that about a slowdown in economic growth in Germany, which has been driving growth in Europe. Germany's economy grew just 0.4 percent in 2013, according to preliminary data, the slowest since the global financial crisis in 2009, slipping from 0.7 percent in 2012.
"That is also the danger for Europe," Nabarro said. "If effectively Germany is slowing down, then of course European consumption especially will slow down as well," he said, noting consumption in France is also slowing.
(Read more: Barroso insists: Europe's crisis is not over yet)
He is underweight on the food and beverage, consumer and capital goods and luxury sectors.
To be sure, it isn't clear whether many analysts share his view.
Societe Generale, for example, is sticking with its "strongly bullish" call on the euro zone.
"Strong inflows triggered by reallocation from emerging markets, anticipation of ECB (European Central Bank) 'easing' and improved governance should underpin the attractiveness and thus the valuation of euro zone assets," the bank said last week in a report subtitled "don't miss the fast train."
(Read more: US stocks: So last year? 2014 is all about Europe)
SocGen also expects the region's banks to outperform, anticipating the ECB will keep policy easy and will likely add more liquidity in coming months to spur more lending.
Others expect Germany will offer a driver, rather than a headwind, for the continent as the nature of its economic growth is changing.
"German consumption has contributed more to GDP (Gross Domestic Product) than exports since the beginning of 2013," noted Sean Darby, global head of equity strategy at Jefferies. "That's been one of the big sea changes we think that's likely to help the rest of Europe and possibly start to bail out some of Eastern Europe as well," he said.
—By CNBC.Com's Leslie Shaffer; Follow her on Twitter